4.75% award wage rise a new cost to bear for aged care operators
Wage rise lands before funding relief
- 4.75% increase: Award wages rise from 1 July
- Three-month lag: AN-ACC funding doesn't increase until October
- Margin squeeze: Providers absorb higher costs upfront
- Growing pressure: Sector wants funding aligned with wage decisions
On Tuesday, the Fair Work Commission announced a 4.75% increase in award wages, citing the need for a catch up in real wages and to offset cost-of-living pressures.
With the next increase in AN-ACC funding not commencing until 1 October, aged care operators will be left carrying the Annual Wage Review decision for at least three months.
At a time when care margins are already constrained across the residential and home care sectors, aged care operators paying the award wage will be slugged with higher, unfunded wage costs. It's estimated there are 9,200 workers on the Aged Care Award alone.
The new national minimum wage of $26.44 per hour, or $1,004.90 per week, will take effect from 1 July. The rise will flow through to Award-reliant workers, including - for aged care - the Aged Care Award, the Nurses Award, and the Social, Community, Home Care and Disability Services (SCHADs) Award.
Many in the sector say the timing of AN-ACC funding increases needs to be brought forward to better align with Award wage rises.
In last year's consultation on the Independent Health and Aged Care Pricing Authority (IHACPA)'s Pricing Framework for Australian Residential Aged Care Services 2025-26, Ageing Australia wrote in their submission the October timing limits the ability of providers to budget and plan for their businesses.
